How Sweat Economy Brings Real Value To Move-To-Earn
The move-to-earn trend has been getting more attention in the crypto space, but not always for the right reasons. It’s a movement that grew out of the rise of so-called “play-to-earn” games, hitting on the idea of rewarding people with cryptocurrency for being physically active.
The basic premise of M2E is that people get paid in crypto simply for walking, jogging or running. It’s a concept that aims to promote healthier lifestyles – not only do you get fit, but you can make some money too. It means people have a greater incentive to get themselves up off of the sofa and start doing activities that promote better health.
When the M2E economy first sprang to life in late 2021, it rapidly caught on and the value of its top projects’ tokens soared to over $1 billion by May 2022. However, the market for those tokens was rapidly eroded by crypto’s bear market conditions, and some of the most popular M2E apps soon found themselves being criticized for basing their models on Ponzi-style economics.
The argument goes that the value of M2E tokens can only grow while the app’s user-base grows. The tokens are essentially minted from thin air, and as more users join in more of them enter into circulation, diluting their value. That’s okay as long as the user base is constantly growing, as it ensures rising demand for the tokens. But no app can maintain growth continuously, so there comes a time when demand abates, causing the token price to decline.
A Superior M2E Economy
It’s these issues that allow Sweat Economy to stand out from the crowded pack of M2E apps. Unlike most of its competitors, Sweat Economy has actually been around for several years already. It began life as a Web2 app called Sweatcoin way back in 2014, and while its founding team always had the idea of creating a token-based economy, it realized that it couldn’t do so yet. So it waited until better blockchain networks and P2E mechanics became established before expanding into Web3.
Sweatcoin was incredibly successful as a Web2 app and already had over 100 million regular users prior to launching its Web3 variant on the Near Protocol last year. One of its main advantages is that it had already come up with a profitable business model. Sweat Economy makes money from its user base through a combination of sponsorships and in-app advertising from fitness brands that are only too willing to pay to be able to target its 100-million strong user base.
The Sweatcoin app’s marketplace features more than 600 brands selling everything from music subscriptions to pet food. These companies provide Sweat Economy with products for free simply to be featured on its marketplace. So it’s a very different business model from other MTE apps in the way it derives value.
Now, as it transitions to Web3, Sweat Economy is able to incorporate its digital assets into an already successful business model, providing utility for its reward token SWEAT in the form of discounts on products it sells through its app and access to other services. As a result, its token has real value that’s based on utility, rather than simple demand-based economics.
By providing users with an incentive that has genuine, real-world utility, Sweat Economy has shown demonstrable results in getting people to be more active. The Sweatcoin app rewards users with 0.95 SWEAT for every 1,000 steps they take. These rewards can then be used to purchase products from its fitness brand partners in Sweat Economy’s in-app store. They can also be spent in the physical stores of associated brands, or sold to other users via a cryptocurrency exchange.
Sweatcoin measures user activity using a GPS-based verification algorithm that’s equipped with anti-cheating mechanisms to prevent people from tricking their phones into thinking they’re walking when they’re not. It also puts limits on the amount of tokens users can earn daily.
In 2019, Sweat Economy commissioned the Institute of Digital Healthcare, WMG – University of Warwick to study its user base’s fitness activity. The study of 6,000 users found that the average user increased their daily step count by 20% in the six months after they registered the app, compared to the three-month period prior to using it. What’s more, those users who classified themselves as being overweight or less physically active were found to be more likely to increase their daily step count than those who already considered themselves to be fit and active.
The main takeaway from the study is that Sweat Economy acts as an especially strong incentive for those who need to increase their physical activity the most.
Direct Benefits Are The Real Incentive
Sweat Economy had established itself as one of the world’s most popular fitness apps long before the M2E economy emerged. Its business model is based on rewarding users with a digital token that has real utility, enabling users to receive discounts on products sold through its in-app store or simply sell them and pocket the money as a reward. What’s more, it has a carefully designed tokenomics structure, where SWEAT tokens are burned and removed from circulation when they’re spent, ensuring a balanced supply to maintain its value.
Sweat Economy’s secret to M2E success is a viable business model and a token that provides direct benefits to users within that existing ecosystem. It’s providing a real incentive for people to move to earn, setting the standard for a movement that aims to bring value to ‘movement’ itself.